Introduction
To encourage individuals to invest in clean electricity-generation capacity, the solar energy tax credit was available for one year. Below you will find everything you need to know about this rebate and how to claim this filing season starting 15 July 2024.
Did you know about the solar panel tax rebate?
In 2023, the Minister of Finance introduced a solar panel tax rebate in the Budget Speech. It is a financial incentive for individual taxpayers who install solar panels. The rebate applies to qualifying solar photovoltaic (PV) panels that are are brought into use for the first time during the period commencing on 1 March 2023 until 29 February 2024.
Who can claim the solar tax incentive?
Individuals who pay Personal Income Tax and install new and unused PV panels can claim the rebate of 25% of the cost of these panels, up to a maximum of R15 000, against their tax liability. This rebate does not apply to solar installations at business premises.
How do I claim the rebate?
If you qualify for the rebate, you must include the total cost of the PV panels when completing and filing your Income Tax Returns (ITR12) for 2024. SARS will calculate the rebate for you, so you do not need to do so when completing your tax return.
How does SARS calculate the solar rebate?
Solar panels can be claimed for 25% of the cost of new and unused PV panels, up to a maximum rebate of R15 000.
Example 1: a person buys ten PV panels at R4 000 per panel (totalling R40 000). That person can claim 25% of the cost up to R15 000, so R10 000.
Example 2: a person buys 20 panels at R4 000 per panel (totalling R80 000). Of this total, 25% adds up to R20 000, which exceeds the maximum claim of R15 000, so the claim is limited to R15 000.
What are the requirements for claiming the solar panel tax rebates?
- Only new and unused PV panels panels brought into use for the first time by the taxpayer during the period commencing from 1 March 2023 until 29 February 2024 will qualify. They can be installed as part of a new installation or as an addition to an existing solar system.
- The panels must have a minimum capacity of 275 W per panel.
- The panels must be installed at a primary residence (home) that is used mainly for domestic purposes.
- The panels must be part of a system that is connected to the distribution board of the residence.
What supporting documents do you need to claim the solar panel tax rebate?
To claim the rebate, keep the following documents ready for verification by SARS:
- An Electrical Certificate of Compliance (COC) issued in terms of the Electrical Installation Regulations of 2009. Such a certificate must contain:
- Certificate number.
- The registration number and contact details of the electrical contractor who completed the installation and certification.
- An invoice and proof of payment or payment agreement for the purchase of the PV panels.
- The invoice should reflect the number of panels purchased, the cost per PV panel, and the wattage of each panel.
- If relevant: separate invoices for the various components.
- Proof of the date of installation of the panels and the date when they were first used.
- This information will be on the COC provided and must be signed off by an electrician.
- If you used the PV panels for the first time before 29 February 2024, but a delay caused the electrician to issue a COC in the 2025 tax year, you must give SARS written proof (such as an invoice or confirmation from the installer) that you used the panels for the first time in the 2024 year of assessment.
- Proof that the installation is for a residence used mainly for domestic purposes by the natural person who acquired the PV panels.
- Proof of ownership if the taxpayer owns the property, or proof of property use — such as a rental agreement or utility bills — if the taxpayer only resides on the property.
What is excluded from the cost that is eligible for the solar tax rebate?
The rebate does not include the cost of the inverter and batteries needed to complete the solar system. It applies only to the cost of the PV panels.
Can I claim the solar tax rebate if I am renting a home?
Yes. The rebate does not require property ownership, so installations by landlords or renters are eligible. However, only the party who paid for the solar panels can claim the rebate.
Need more information?
- For a detailed discussion of the solar tax credit, see the Guide on the Solar Energy Tax Credit Provided under Section 6C.
- See the Interpretation Note 95 Deduction for energy efficiency savings.
- For more information, see the Comprehensive Guide to the ITR12 Income Tax Return for Individuals.
